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climate-changed

Another Utility, Another Share Sale Because of U.S. Tax Overhaul

  • PPL needs to generate additional cash to keep credit rating
  • Duke, Dominion also selling shares because of tax measure

While oil and gas producers reap billions in gains from the U.S. corporate tax cut, PPL Corp. has become the latest utility the measure has forced to ramp up stock sales to generate cash.

Because customers will be paying less toward the company’s taxes, the owner of U.S. and U.K. utilities will have to sell almost three times as many shares as it had originally planned in 2018 to generate the cash to maintain its credit ratings, executives said on an earnings call Thursday. Utilities Duke Energy Corp. and Dominion Energy Inc. have announced similar sales.

PPL plans to sell $1 billion in shares, up from the $350 million it had previously anticipated. It also plans to harvest an additional $100 million to $300 million from its regulated utility in the U.K. and cash out some in-the-money currency hedges as they mature that were taken to protect against a Brexit-related slide in sterling, Chief Executive Officer Bill Spence said on the call. Tax reform lowered PPL’s fourth-quarter net income by $321 million, and earnings will also be crimped this year, the executives said.

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